Sluggish Deployment: Mining industry yet to speed up technology adoption

Mining industry yet to speed up technology adoption

India’s mining industry has faced stagnant growth over the years and its contribution to GDP remains dismal. The country lags behind other mining countries in all aspects of mining – geosciences, exploration, development, production and reclamation. Increasing productivity in the sector will play a crucial role in driving the country’s economic growth.

Adoption of advanced technologies such as automation, robotics, artificial intelligence, etc. can help in reinventing the sector and boosting mineral production. The industry has moved towards digitalisation of operations in the past few years, though the transition has been much slower than in other mineral producing countries such as the US, Australia and China, and limited only to a few big players. Several factors such as high cost, lack of skilled manpower, etc. have hampered the industry’s digital journey.

Major challenges

High investment requirement

The use of the latest equipment and technology involves massive capital expenditure. Low commodity pricing, maturing mines and the growing need to maintain competitiveness have shifted the focus of mining companies towards achieving cost reduction, thereby leading to slow adoption of modern technologies. The lack of adequate fiscal support from the government and soft financing by banks and financial institutions are also constraining factors for miners in procuring high-tech equipment.

Focus on short-term costs, instead of long-term benefits

A key issue obstructing the deployment of technologies in the sector is the focus on short-term costs rather than on long-term realisation of benefits. Digital projects require huge initial investments and the returns are reaped in varying lengths of payback periods. There is also a perception that IT-enabled projects often over-promise and underdeliver, and this delays decisions with respect to deploying digital solutions.

High fragmentation in industry

The domestic mining industry is highly fragmented with the presence of both big mining companies and several medium and small operators. While digitalisation is gaining ground with big miners, it is not yet a priority for medium and small operators, who continue to deploy older technologies and stick to conventional mining methods. Lack of feasibility for smaller mines and uncertainty of benefit realisation are the main inhibiting factors.

Greater demand for low-cost, inefficient equipment

The growing demand for low-cost, inefficient equipment is another concern. Equipment manufacturers in countries such as China, South Korea and Hong Kong have relatively lower costs of production. They also enjoy the benefits of export incentives provided by their countries. India’s favourable import duty regime further increases the demand for such equipment by the domestic mining companies.

Inadequate power supply

Many mines in the country are either isolated from the central power grid or located in areas with inadequate mining infrastructure. Supplying power through on-site generators fuelled by diesel or oil becomes a major cost for mining companies. Since most of the equipment, except for transport vehicles, depend on electricity for their operations, the non-availability of continuous power supply becomes a roadblock in achieving high utilisation levels of mining equipment.

Lack of skilled labour

The unavailability of skilled labour is a major hindrance to technological advancement in the mining industry. The deployment of innovative technologies in the sector will not only require skill upgradation of the existing workforce but will also create demand for additional digitally literate manpower. Further, upskilling also requires significant investments, as most mines in rural areas have little or no infrastructure for training centres.

Cybersecurity risk

While technologies such as internet of things, cloud computing, etc. represent immense possibilities for businesses in the mining sector, they also increase cybersecurity threats. Mining companies will have to address these issues in their digital roadmap and risk management plans. Managing cybersecurity issues could also result in increased costs for the mining companies.

Geotechnical complexities

Geotechnical complexities in coal mines in India such as hard-roof strata, gassiness of coal seams, thick intra-banded seams, steeply dipping seams and higher relative humidity present challenges in the adoption of technologies.


As India aims to boost its mineral production, adoption of advanced mining technologies will become necessary. Digital solutions will not only help in increasing output but also address the critical issues of environmental degradation and mine safety. Thus, there is a pressing need to address the challenges related to the deployment of innovative technologies and equipment by training the workforce, undertaking research and development activities, providing financing support and collaborating with international players.